New Delhi, Jan 12: Shares of GAIL (India) on Tuesday gained nearly 6 per cent after the company announced it will consider buyback of shares. The stock jumped 5.74 per cent to Rs 143.50 -- its 52 week high -- on BSE.

On NSE, it gained 5.74 per cent to its one-year high of Rs 143.50.

GAIL (India), the nation's largest gas distribution firm, will on Friday consider buyback of shares with a view to returning surplus cash to shareholders, the biggest being the Government of India.

In a stock exchange filing on Monday, the company said its board will meet on January 15 to consider share buyback as also payment of interim dividend for the fiscal year ending March 2021. The firm, however, did not give further details.

The government has asked at least eight state-run companies to consider share buybacks as it scours for ways of raising funds to rein in its fiscal deficit.

The firms asked to consider share buybacks include miner Coal India, power utility NTPC, and minerals producer NMDC.

A buyback, also known as a share repurchase, is when a company buys its own outstanding shares to reduce the number of shares available in the open market.

Companies buy back shares for a number of reasons, such as to increase the value of remaining shares available by reducing the supply or to return surplus cash to shareholders.

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